Jewish World Review Feb. 4, 2004 / 12 Shevat 5764
Here's what America doesn't need: Another New Deal
No American political symbol is stronger than that of the New Deal. Franklin Roosevelt was thinking of a specific event, the Great Depression, when he first constructed his image of the card table: Americans he said, should not be trapped playing the losing game of the Depression but deserved a fresh hand, a New Deal. Yet nearly every Democratic presidential candidate since Roosevelt has invoked the New Deal--and even a few Republicans have tried out New Deal phraseology. The way that a candidate employs the image reveals much about his candidacy.
Take John Kerry. Kerry, the Massachusetts senator who is the front-runner in the race for the Democratic presidential nomination, puts the New Deal at the forefront of his campaign, labeling his agenda "The real deal."
The obvious reason for this choice is that the New Deal was the policy of his party's most successful politician.
FDR won 7 million more popular votes than the incumbent Herbert Hoover; he carried 42 of 48 states. Democrats took both Houses. The people were granting Roosevelt license to rewrite the national program, an extraordinary act in a nation built on the principle of separation of powers. Roosevelt exploited that license with his 100 Days program following his inauguration.
Kerry is already talking of the program of his own first "100 Days" agenda, through which he wants to suggest the potential to win a landslide. After all it would be silly to cite Jimmy Carter when you can invoke Roosevelt.
It was not merely Roosevelt who became powerful after such a victory; it was also his party. The "Brain Trust" who advised FDR had studied the revolutions of Europe. They admired the authority and the audacity of the new leaders.
"Why should the Russians have all the fun of remaking a world?" asked Stuart Chase, author of a 1933 book titled "The New Deal." With the New Deal, the Democrats could have fun of their own. Such fun probably inspires Kerry's advisers, who yearn for victory after the bitter outcome of the 2000 presidential election.
But Kerry has another reason for presenting himself as a New Deal candidate. He may not be apocalyptic like Howard Dean, but he still wants to generate a sense of emergency similar to the one that prevailed in the early 1930s. He wants to suggest that the economy is fundamentally flawed.
After all, President Bush has his emergency, the War on Terror. And as crass as it seems, this emergency is good political luck for Bush: vVoters find it hard to turn against a commander in chief. If Kerry can convince the nation that it is enduring a parallel economic emergency, he strengthens his candidacy.
This seems only fair until you consider the facts of the Depression, some of which are beginning to slip out of national memory. The economy did not merely shrink a little bit. (Someone recently asked me: "How low did growth get in the Depression?") It shrank by one fourth. Unemployment came close to 25 percent. As for the money, it literally ran out.
Next to the 1930s, today's economy seems benign. There are problems. The switch from a manufacturing economy to a service economy is rough. The U.S. is losing manufacturing jobs--albeit not jobs overall. The new drug entitlement for senior citizens is untenable, a truth recently underscored by the Congressional Budget Office. Payroll taxes are too high. Fannie Mae and Freddie Mac, the too-big-to-fail mortgage brokers, could fail and drag the rest of us down with them, although we have not heard much about that from the campaigns.
But this economy suffers neither serious inflation nor deflation and enjoys both outstanding productivity gains and strong growth. Americans today speak of "growth recessions," a luxury enjoyed by few developed countries. Headlines read "Disappointing 4 percent growth." Disappointing, one has to ask, to whom? Two groups: opponents of Bush and bond traders. As much as an economic emergency might serve Kerry, there isn't one. Kerry himself even acknowledges this, in his way, by proposing a deficit plan nearly identical to the president's: Kerry wants to halve the deficit in four years, Bush in five.
Here we could argue that Kerry is not the only politician guilty of exaggeration. To the chagrin of his advisers, Ronald Reagan, the man who ran as the FDR of the right, called the recession of 1980 a "depression." Bill Clinton won by focusing on the message "It's the economy, stupid," in a quarter when real growth was higher than 5 percent.
But bashing the economy is not the only way for a Democrat to win. John Kennedy put a positive spin on the New Deal, calling his plan the New Frontier. The idea was to conquer space with the same energy that 1930s Americans had conquered their challenges. The point of Kennedy's phrase, "ask not what your country can do for you," was to go beyond expanding entitlements: contrast this with Kerry's statement about economies working for people. Kennedy recognized that he could not be too gloomy: 1960 saw growth of 2.5 percent.
Given that the economy is now operating in a similar range, it is striking to find Democrats pulling such dour faces. They may succeed in their bluff. But only if Republicans let them.
For as economic hands go, the one currently being dealt to the average American is a fine one indeed.
Every weekday JewishWorldReview.com publishes what many in Washington
and in the media consider "must reading." Sign up for the daily JWR update. It's free. Just click here.
JWR contributor Amity Shlaes is a columnist for Financial Times
. Her latest book is
The Greedy Hand: How Taxes Drive Americans Crazy and What to Do About It. Send your comments by clicking here.
01/150/04: Forget Mars, U.S. economy looking like the final frontier
12/30/03: Bob Bartley put morality's place in the market economy
12/18/03: Mission accomplished: 1991's, that is
12/11/03: Shrugging off outdated data: Inside America's economic machine
11/13/03: Leaving a little something for the kids? Good luck
11/05/03: Never, Never will we Desist
09/30/03: Tax, lies and a few supply-side parables
10/09/03: Free markets are the key to rebuilding Iraq
09/25/03: Don't be sentimental, Mr. Bush
08/12/02: Howard Dean, Robin Hood
05/29/02: Berlin Diarist: To believe that by self-improvement and restraint, we can end tyranny
03/27/02: The curse of oil
11/12/02: Political Correctness at the Fed (No joke!)
10/31/02: Local enforcer who has changed national laws
10/12/02: No Mirror for Europe; US is a picture of unity
08/14/02: Keeping your financial eggs at home
07/24/02: New Democrats' unaffordable luxury
06/26/02: The evolution of eminent domain is the story of the lasting power of Supreme Court decisions to alter the American cultural fabric
06/20/02: The distinction between known risk and uncertainty: What was lost in the Martha Stewart flap
06/11/02: Europe, long waiting for a chance to assert itself as independent from the US on the world stage, is clueless to terror's threat
06/04/02: A Cold Warrior's lessons for the Middle East
05/21/02: Geography does matter when it comes to development, but aid must nonetheless be linked to good governance
05/14/02: The increasing number of new claims is hurting innocent companies and making a mockery of the Common Law system
05/09/02: Aid, development and guilt in our times of terror
04/30/02: Wine lovers may at last be able to stray across state borders. The Internet is coming to the aide of free trade
04/23/02: Taxation by way of Madison Avenue
04/17/02: Special relationships and free trade do not mix
04/08/02: Is terror the flip side of globalization?
03/20/02 Bush gives aid but seeks results
03/13/02 The Danger in policy by numbers
02/26/02: States' smokescreen for tax hypocrisy
02/20/02: Echoes of leadership against a global threat
02/13/02: Jackson Vanik May be a Useful Analogy When Thinking About the Middle East
02/07/02: Budgeting for victory: Requiem for a peace dividend
02/05/02: The detectives of 1930s pulp fiction had a nose for clients bearing gifts. Sadly, those consulted by Enron did not
01/22/02: Allow all American children a decent chance
01/15/02: Do not disturb the profit-sharing revolution
01/09/02: It is dangerous to elevate a currency as a political emblem if the need for other economic reforms is obscured
01/03/02: There is only one way for a free thinker to bring up children
12/20/01: Why America's economy always bounces back
12/18/01: When it comes to taxes, Washington lawmakers can learn a thing or two from The Honeymooners
12/13/01: Bush opens a new era
12/12/01: A flamboyant reversal for the Democratic party
12/06/01: Threat of an oil embargo on the U.S. is a bluff
11/29/01: Which is more important--the war or diplomatic comity?
11/20/01: Unbalanced by a wealth of oil and diamonds
10/17/01: Afghanistan Needs a General MacArthur
09/27/01: The US has gained an understanding of the costs of war for which its European allies have hitherto wished in vain
09/13/01: War against terrorism will rise from the ashes
08/15/01: Geography is no excuse for the state's economic stagnation. Its policymakers should take a leaf from Ireland's book
08/07/01: Teamsters may pay a heavy price for winning its batle in Congress
07/25/01: Towards a patent-free nirvana?
07/17/01: History proves the lasting value of tax cuts
07/10/01: Stem cell research has awakened a bitter debate in Washington but voters care more about other electoral issues
07/03/01: America foots the bill for Europe's largesse
06/26/01: America the litigious, land of the lawyer's fee
06/20/01: Five reasons for gloom about global growth
06/18/01: Show pity for Alice in Tax Wonderland
06/13/01: America must take a French lesson in trade
06/11/01: Time to dream the impossible dream for Iraq
06/07/01: Whatever happened to simple?
06/04/01: When the relationship between companies becomes as close as a marriage, the eventual break-up is often very painful
06/01/01: Loving and hating the Bush tax bill
05/30/01: Will Grisham soon be unemployed? In America's courts these days, there's no room left over for legal fiction
05/22/01: Republicans sample the rhetoric of confidence
05/16/01: Boeing has been promised $60m to site its headquarters in Illinois. The deal looks a poor one for taxpayers
05/14/01: Adam Smith in love
05/09/01: Those rotten Russian capitalists
05/07/01: Why tax havens provide shelter for everyone
05/04/01: Middle classes pay for get-the-rich folly
05/01/01: Money can't buy happiness? Think again.
04/26/01: Calling America's rogues and entrepreneurs
04/19/01: High earners right to feel lonely at the top
04/11/01: The right must learn the comfort of strangers
04/04/01: When domestic law arrives by the back door
03/30/01: A Lexus tax cut suits the jalopy driver
03/27/01: The unchallenged dominance of King Dollar
03/20/01: Natural selection of an intellectual aristocracy
03/16/01: The hidden danger of a regulatory recession
03/14/01: Is the American condition that boring? Why so many Oscar nominated movies aren't set in America
03/07/01: Trampling on the theory of path dependence
03/05/01: Fighting the good fight
03/01/01: It is time for Fannie and Freddie to grow up
02/27/01: IT's important
02/22/01: The guilty conscience of America's millionaires
02/14/01: The benefits of helping the 'rich'
02/09/01: The Danger and Promise of the Bush Schools Plan
02/05/01: Crack and Compassion
01/31/01: Debt is good
01/24/01: A gloomy end for a half-hearted undertaking
01/17/01: The challenge of an ally with its own mind
01/15/01: An unexpected American family portrait
01/10/01: A fitting legacy for America's beloved dictator
01/08/01: The trick of tax 'convenience'
01/03/01: Time to stop blaming Greenspan over taxes
12/11/00: So smart they're dumb
12/06/00: How economic bad news came good for Bush
12/04/00: The Boies factor
11/30/00: "The inevitable demands for recounts erupted like acne…"
11/28/00: Fair play and the rules of the electoral game
11/23/00: The shining prospect beyond a cloudy election
11/21/00: Try the Cleveland model
11/16/00: A surprising winner emerges in the US election
11/09/00: Those powerful expats
What's right for America versus what works
11/02/00: Time to turn off big government's autopilot
10/30/00: Canada beating America in financial sensibility
10/26/00: When progressiveness leads to backwardness
10/24/00: The most accurate poll
10/19/00: The Middle East tells us the hawks were right
10/17/00: The split personalities of America's super rich
10/10/00: 'Equity Rights' or Wake up and Smell the Starbucks
10/04/00: Trapped in the basement of global capitalism
09/21/00: The final act of a grand presidential tragedy
09/21/00: Europeans strike back at the fuel tax monster. Should Americans follow?
09/18/00: First steps to success
09/13/00: America rejects the human rights transplant
09/07/00: Minimum wage, maximum cost
09/05/00: Prudent Al Gore plans some serious spending
08/31/00: A revolution fails to bring power to the people
08/28/00: A reali$tic poll
08/21/00: "I Goofed"
08/16/00: Part of the union, but not part of the party
08/09/00: Silicon Alley Secrets
08/02/00: Radical Republicans warm up for Philadelphia
07/31/00: I'll Cry if I Want To
07/27/00: Cold warrior of the new world
07/25/00: The Estate Tax will drop dead
07/18/00: Shooting down the anti-missile defence myths
07/14/00: A convenient punchbag for America's leaders
07/07/00: How to destroy the pharmaceutical industry
07/05/00: Patriots and bleeding hearts
06/30/00: Candidates beware: New Washington consensus on robust growth stands the old wisdom on its head
06/28/00: White America's flight to educational quality
06/26/00: How Hillary inspired the feminist infobabes
© 2003, Financial Times